Welch's Contractor Loophole Bill Passes House of Representatives

Regarding this week's cover story: Legislation introduced three weeks ago by Rep. Peter Welch to require overseas contractors to report cases of waste, fraud or abuse has passed the House of Representatives on a voice vote, according to a press release issued this afternoon by the Vermont congressman's office.

In November, the Justice Department drafted a rule seeking to crack down on financial improprieties in government-funded contracts. The rule required contractors to report internal fraud or overpayment only if the abuse exceeded $5 million. However, just before publication, the rule inexplicably excluded “contracts to be performed outside the United States.”

Welch, who first brought the loophole to public attention, asked the Oversight and Government Reform Committee to investigate and introduced legislation to correct it. “This loophole is so outrageous that once exposed in the light of day it was simply indefensible," Welch said, in a written statement. "No contractor should be given a green light to defraud taxpayers. We need to protect taxpayer dollars and our troops serving overseas by closing this loophole with the force of law.” The Bush administration had claimed the loophole was a simple rule-drafting error.

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